No Accountability


Perhaps the most disconcerting aspect of the redirection of property taxes to fulfill the State's non-school obligations is the complete loss of accountability.   


A billion here, a billion there.  It adds up after a while.  And, more worrisome, no one has made the connection between excess VLF transfers and funding shortfall to the schools since 2008-09, when the Governor's Budget Summary last trumpeted it:


... we estimate the VLF swap has cumulatively allowed counties and cities to retain an additional $2.7 billion in property tax revenues that otherwise would have been directed to K-14 schools.

— Governor's Budget Summary 2008-09 p. 232

It was only when, as parents, we began to research local school districts -- and they showed no net local property taxes -- that a flag went up in our minds.  But then we were told not to worry -- that the state was backfilling the transfers, holding the schools harmless, making them whole.  But it did not 'make them whole' for a four-year period from 2008 - 2012 -- and, indeed, is only hoping to do so now because Prop 30 raised income taxes. 

Even more surprising, the tenor of the Legislature's discussion does not appear to be, 'how do we rein in this excess expenditure,' but rather, 'how can we make it fair to those VLF swap recipients whose local schools have no more to give?'

Had the state adopted a mechanism that provided for reimbursement of city and county actual VLF revenue losses only, annual payments to cities and counties would be about $2 billion less today than under the VLF swap.


— Insufficient ERAF, Legislative Analyst's Office, December 2012